Shell Firms Used to Divert Funds, Section 45 PMLA Bars Relief: Calcutta HC Denies Bail in ₹11.6 Crore Loan Scam [Read Order]
204–205 days in custody were not excessive, given the seriousness of the alleged offences and misuse of political/official position
In a recent ruling Calutta High Court has refused bail in connection with the alleged ₹11.6 crore loan scam, stressing that funds were funnelled through shell companies and dummy directors to divert money for personal benefit and that the stringent twin conditions under Section 45 of the Prevention of Money Laundering Act (PMLA) restrict bail in such cases.
The matter arises from FIR No. 14/2025 alleging offences under Sections 406, 409, 420, 463, 467, 468, 471, and 120B of the IPC, The Enforcement Directorate (ED) alleged that Sharma influenced bank officials to sanction fraudulent loans worth ₹11.6 crore, routed through shell companies and dummy directors, with funds traced to his relatives and associates. Properties worth ₹2.86 crore were attached under PMLA.
The petitioner, Kuldeep Rai Sharma, argued that he was falsely implicated due to political rivalry and pointed out that no funds were found in his family's accounts; the ED's claims were based on indirect links.
It is also argued that the petitioner was only the Vice Chairman of the bank at the time loans were sanctioned and suffers from hypertension, thyroid disorder, and sleep apnea and contended that Trial Will Be Lengthy With 99 witnesses and 65,000 pages of documents, the trial would take years. Keeping him in custody for such a long period was unfair.
On the other hand, ED contended that the petitioner misused his position to push fraudulent loans and that evidence showed ₹41 crore linked to him through cash, cheques, and property transactions. They argued his health issues were manageable with medication, unlike other accused who had life‑threatening conditions, and warned of the risk of witness tampering if he were released.
The high court observed that, based on witness statements recorded under Section 50 of the PMLA Act, it could not conclude at this stage that the petitioner was innocent and being in custody for about 204–205 days was not considered excessive, given the seriousness of the offences alleged and the misuse of official and political position.
It is also pointed out that there was a risk of the petitioner influencing or intimidating vulnerable witnesses if released.
The bench, Justice Apurba Sinha Ray, held that since the petitioner failed to meet the strict bail conditions under Section 45 of the PMLA Act, the court declined to grant bail and rejected the petition
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